Listed legal business Quindell has revealed it is now handling 44,500 industrial deafness claims – despite rejecting 75% of cases that are reported.
In a trading statement for the third quarter of 2014, the company said it has agreed the ‘first few’ settlements for noise-induced hearing loss ahead of plan.
The group says it has driven down the cost of the claims, with income 31% less than estimates by the Association of British Insurers.
The ABI has been a critic of the rising number of deafness claims, stating that claimant lawyers settling industrial deafness claims last year earned fees averaging £10,500.
Quindell told the London Stock Exchange that it has a ‘two-stage vetting process’ for considering the merits of cases: an initial clinic and two separate hearing tests.
Overall, the Quindell board said revenue for this year is expected to be between £750m and £800m, although in August the company had been expecting revenue of £800m to £900m in financial year 2014-15.
The growth of legal services revenue has contributed to pre-tax profit of £83m for the quarter ending 30 September, compared with £34.5m for the same period in 2013.
The statement said legal services brought in £760,000 per business day by the end of September, compared with £500,000 a day at the end of the first quarter.
Profit margin is expected to be between 40% and 45% this year, up from its previous range of 35% to 45%.
The subject of industrial deafness is likely to be a future battleground between claimants and defendants, with some insurers already calling for more stringent rules on assessing the viability of claims.
In a guest blog for the Association of Personal Injury Lawyers, executive member Bridget Collier said insurers’ misgivings about fraud ‘make us wonder if they are simply trying to avoid paying out by shaming people out of claiming’.
Collier said the current test procedure will make it obvious when someone is making a fraudulent claim.
‘Insurers say that three years ago the number of fraudulent noise-induced hearing loss investigations was less than half the number it is now,’ she added. ‘On the back of this, insurance industry representatives claim that the answer lies in culling solicitors by reducing their fees presumably so we won’t take the work on.
‘The fact is, in the last three years more information about the right to claim for hearing loss has become widely available.’